Amazon Challenges GameStop by Booting Up Video Game Trade-Ins

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Online mega-retailer Amazon.com is taking on leading games retailer GameStop by launching a game trade-in program. Under the deal, gamers can pack up unwanted titles in good condition and mail them to Amazon; in return, Amazon will give the gamers credit they can use to buy other goods from Amazon—including a 10 percent bonus towards purchases from Amazon’s video games store.

Amazon’s move opens a new front of competition with leading games retailer GameStop, which has long held a strong lock on the used game business. Gamers can bring unwanted titles to GameStop and receive a portion of the retail price in cash or store credit; GameStop then turns around and resells the used games at profit margins that are actually higher than new releases. The business has proven to be a profit center for GameStop, which has built up a strong selection of titles across its large number of retail locations.

Other brick-and-mortar retailers like Best Buy have tried to get into the used game business, albeit with considerably less success; industry reports have Toys’R’Us also looking at the used game market.

Video game industry watchers generally don’t think Amazon’s entry into the used game market poses an immediate threat to GameStop’s retail used games business, but, then again, nobody thought mail-order DVD rental king Netflix would pose a significant threat to brick-and-mortar Blockbuster when it started out, either.